Being innovative is increasing in importance among companies, a BCG survey finds. The need to compete in a rapidly changing environment with changing consumer expectations means that many companies cannot remain complacent. Being successful in innovation remains difficult however; being quick to market with their innovative product or service, is one technique growing in allure for companies. Agile leaders tend to apply lean techniques, with having defined product specifications and intelligent launch plans the most important lean differentiators.

Innovation allows a company to create completely new offerings, or as technology continues to develop new avenues of opportunity, radically redefine business areas through disruptive operating models. Innovation today is big business, with a recent Strategy& report highlighting that the globe’s 1,000 largest R&D spenders collectively spend $680 billion a year on developing innovations. Execution though remains a challenge, with another report from PA Consulting Grouphighlighting that innovation failures cost UK companies up to £65 billion per year.

In a recently released report, titled ‘The Most Innovative Companies 2015: Four Factors that Differentiate Leaders’, the Boston Consulting Group (BCG) surveyed 1,500 senior executives from a wide variety of industries in every region to gain insight in their views of innovation management.

The study highlights the continued need for companies to invest in innovation. 79% of this year’s respondents ranked innovation as either the top-most strategic priority or a top-three priority at their company, the highest result since the start of the study ten years ago (2005), when 66% placed it within the same categories. While innovation has ranked as a top three strategic priority with more than 70% of the executives over the past five years, its score as a top priority has been trending downwards since 2010, when 26% of companies surveyed saw innovation as the key priority.

Besides innovation becoming more and more important, what companies think is important about innovation has shifted since last year. Compared to last year, 22% more organisations now think that the speed of adopting new technology has become the key driver for nurturing ideas and concepts, while Big Data analytics and technology platforms come in at 9% and 8% more important respectively. Aspects of innovation that lost importance since last year include supporting capabilities, dropping -15%, extension of existing services, down -12% and new services, down -10%.

According to respondents the biggest issues facing companies in their bid to generate a return on innovation/product development investment is that development times are too long, up from 36% in 2014 to 42% in 2015. This is followed by selecting the right ideas to commercialise, up 2% since last year to 32%. The second biggest mover since last year is risk-adverse culture, up from 25% to 31% this year. Of least concern, and one of the only categories to see negative change is compensation not tied to activity, down from 12% last year to 11% this year. Leadership commitment importance is up slightly from 10% last year to 12% this year.

The survey highlights that being quick in bringing new innovations to markets has a number of benefits for companies, having the potential to boost a company's top and bottom lines, while meeting consumers’ demands. According to the analysis the financial benefits are often “directly measurable and vastly exceed the up-front costs of introducing speed-to-market approaches to the organisation.”

Companies that perform well in terms of quickly bringing new innovations to markets tend to have a lean efficient production schedule. The consultancy consulted organisations that self-described themselves as ‘fast innovators’ or ‘strong innovators’. Both types exhibited strong agreement on primarily defined product specifications, at 83% for strong innovators and 87% for fast innovators, followed by intelligent launch plans, at 85% agreement for strong innovators and 82% for fast innovators. For strong innovators, modular product lines were the least important at 74% strongly agreeing, while fast innovators saw the least strong agreement for exhibiting parallel development within stringent funnels and accepting failure, both at 77%.